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Greetings --

In 2003 I failed (through oversight, I swear) to report a consultant fee for a couple of presentations I gave for a non-profit organization. Both the IRS and the State found this error in 2004 and billed me for the oversight. I paid both. What impact will this have on taxes for 2004? (Other than putting me on an audit list).

Norm
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In 2003 I failed (through oversight, I swear) to report a consultant fee for a couple of presentations I gave for a non-profit organization. Both the IRS and the State found this error in 2004 and billed me for the oversight. I paid both. What impact will this have on taxes for 2004?

If you itemize deductions for 2004, remember to include the amount you paid the state for the 2003 deficiency. Other than that, no big whoop.

I wouldn't worry about audits. Something caught this soon was caught through document matching and quickly resolved. IMO this won't increase scrutiny of future returns.

Phil
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In 2003 I failed (through oversight, I swear) to report a consultant fee for a couple of presentations I gave for a non-profit organization. Both the IRS and the State found this error in 2004 and billed me for the oversight. I paid both. What impact will this have on taxes for 2004?


If you itemize deductions for 2004, remember to include the amount you paid the state for the 2003 deficiency. Other than that, no big whoop.

Where (on my 2004 return using TT) do I report this deficiency -- state or federal?
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Where (on my 2004 return using TT) do I report this deficiency -- state or federal?

The state tax you paid is a Schedule A itemized deduction. If you paid the state interest and you're still running the same consulting business, you can deduct the interest paid on Schedule C.

Phil
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